Archive for October, 2008

In accordance with a new survey published by the Statistical Unit of Belize, the cost of living in Belize increased dramatically – it jumped 10% between August 2007 and August 2008. This is the highest increase in the last 25 years that was fuelled by run-away inflation topping 17.9%.

The main cause of inflation in Belize is the increase of food and fuel prices. Talking about the food, beverage and tobacco group rose by 65.5%, flour rose by 65.5%, rice rose by 54.9%, while bread by 34.6%.

In July, the Belize Government set USD 90 threshold – this was a price above which a 50% windfall tax on petroleum profits would start to levy. Latest developments in the global market have led to reducing the price of oil below that threshold price. This meant that at current prices the Government of Belize did not earn new taxes on petroleum exports.

Therefore, the Government of Belize revised its revenue projection from the tax on account of falling prices. Tax was revised for the remainder of the fiscal year from USD 18 million to USD 5 million.

Oil prices have dropped below USD 88 per barrel, and this decline in prices was explained by European banking turmoil and fears of a global economic slowdown caused by it.

In July, the windfall tax looked promising as oil prices reached their peak of USD 147 per barrel. Today the prices are so low that the windfall tax cannot be applied at all.

The windfall tax was implemented just recently – on the 1st of September.

The monopoly utility company has fired 19 Belize Energy workers from their jobs. Even more workers have been given notice of termination. Some of employees have been working with Belize Electricity Limited (BEL) for more than 20 years.

President of the Energy Workers Union, Sean Nicholas, claimed that Belize Electricity Limited was trying to destroy the Union by means of getting rid of its members. According to him, workers were intimidated. BEL announced that it is just a downsizing, however, only union workers were fired.

It was announced in the end of September that the government of Belize would sign an oil agreement with the Chinese Petroleum Corporation (CPC). CPC is Taiwan’s largest state-owned oil refiner. The deal was planned to be signed soon to allow the Asian nation to tap large reserves of oil in the waters off Belize.

This oil exploration agreement between the government of Belize and CPC Corp. Taiwan was signed on September 29.

According to Taiwanese Ambassador to Belize, Joseph Shih, the document has upgraded the bilateral cooperation of the two sides to a new level. Shih said that the agreement will allow Taiwan to drill in a 4800 square kilometre area in the waters of Belize.

Diplomatic relations between Belize and Taiwan were established in 1989 after Belize cut its ties with the People’s Republic of China.